Ultragenyx stock rated Outperform as analyst sees $900M peak sales potential

On Friday, Ultragenyx Pharmaceutical Inc. (NASDAQ:RARE) received a reiterated Outperform rating and an $85.00 price target from Leerink Partners. The biopharmaceutical company, which specializes in rare diseases, announced an update on its Cyprus2+ study for UX701 in treating Wilson disease.

The study will now include a higher dose cohort before progressing to Stage 2. This adjustment follows the company's release of initial data last year from Stage 1, which showed promising patient responses in tapering off standard-of-care treatments.

Ultragenyx's UX701 is an AAV9 gene therapy currently advancing through a Phase 1/2/3 clinical trial, aiming to address the dysregulation of copper trafficking in patients with Wilson disease. The Cyprus2+ study is structured in three stages, with Stage 1 focused on safety and efficacy across multiple dose levels.

The latest data from the study includes results from 15 patients across three different dose levels. Six of these patients have completely tapered off standard treatments, and a seventh has begun the process as of the August cut-off date.

Despite varied responses across the different dose cohorts, Leerink Partners does not view the UX701 program as a core focus for Ultragenyx in the near term. Instead, the firm notes that investor attention is largely directed towards the upcoming readout from the ORBIT study with setrusumab, another of Ultragenyx's product candidates. The interim Phase 3 ORBIT study readout is expected by the end of the year or early 2025.

Leerink Partners continues to model the UX701 program with a 30% probability of success and projects gross peak sales of approximately $900 million across the U.S. and European markets. Ultragenyx plans to enroll an additional cohort in Stage 1 with a moderately increased dose and an optimized immunomodulation regime to improve the efficiency and efficacy of the treatment. The company intends to submit a protocol amendment and will provide future updates as the study progresses.

In other recent news, Ultragenyx Pharmaceutical Inc. reported promising results from its Phase 1/2/3 Cyprus2+ study of the investigational gene therapy, UX701, aimed at treating Wilson disease. The study showed improvements in copper metabolism among patients, with some discontinuing standard-of-care treatments. The company plans to extend the study by adding a fourth cohort, which will receive a moderately higher dose of UX701 along with an optimized immunomodulation regimen.

Ultragenyx also reported strong Q2 earnings, with total revenue reaching $147 million, prompting an upward revision of its annual revenue guidance. The company's earnings call highlighted advancements in its clinical pipeline and commercial portfolio, including positive results from Phase III and Phase II trials for key drugs.

TD Cowen maintained a positive outlook on Ultragenyx, reiterating a Buy rating, citing promising Phase 2 Orbit trial results for setrusumab, a treatment for Osteogenesis Imperfecta. The trial data indicated a significant reduction in the annualized fracture rate and an increase in bone mineral density over 12 months.

InvestingPro Insights

Recent data from InvestingPro sheds additional light on Ultragenyx Pharmaceutical's financial position and market performance. The company's market capitalization stands at $4.94 billion, reflecting significant investor interest in its rare disease-focused pipeline. Despite the promising developments in its UX701 program, Ultragenyx faces financial challenges. An InvestingPro Tip indicates that the company is not profitable over the last twelve months, with a negative P/E ratio of -8.44. This aligns with the company's focus on research and development in the costly field of rare disease treatments.

However, Ultragenyx has shown strong market performance, with a 56.72% price total return over the past year. This suggests investor optimism about the company's long-term prospects, possibly driven by advancements in its product pipeline, including the UX701 program for Wilson disease and the anticipated ORBIT study results.

Another InvestingPro Tip notes that 8 analysts have revised their earnings upwards for the upcoming period, potentially indicating growing confidence in Ultragenyx's near-term outlook. This could be related to the progress in the Cyprus2+ study and the upcoming ORBIT study readout mentioned in the article.

For investors seeking a more comprehensive analysis, InvestingPro offers 7 additional tips for Ultragenyx Pharmaceutical, providing a deeper understanding of the company's financial health and market position.

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